Tactical sourcing in SAP Ariba cloud

SAP Ariba Guided Buying capability offers a perfect solution to organizations’ tactical sourcing needs. The cloud solution uses request forms based on the foregoing sourcing processes.

Casual users and functional buyers simply browse for request forms in SAP Ariba Guided Buying catalogs. Each form contains a commodity code, location and preferred suppliers. Quotes from the suppliers can thus be requested in a reactive, less controlled manner without involving strategic buyers in every transaction and activity.

Tactical sourcing possible scenarios in SAP Ariba:

Scenario		Functionality

Self-service		Users fill out request forms in SAP Ariba Guided Buying and choose preferred suppliers to invite. Requests are sent to the suppliers through SAP Business Network. The requester views suppliers’ quotes in SAP Ariba Guided Buying and accepts one of them. By accepting a quote, a purchase requisition is automatically created. This scenario is ideal for frequent small purchases that follow N bids and a buy company policy.

Low-touch High-touch		Users fill out request forms in SAP Ariba Guided Buying. Submitted forms are sent to SAP Ariba Sourcing, where a strategic buyer reviews the data and publishes an RFQ. Based on the scenario, the best quote is awarded by the requester in SAP Ariba Guided Buying (Low-touch), or by the strategic buyer in SAP Ariba Sourcing (High-touch). The purchase requisition is created from the best quote in SAP Ariba Guided Buying. The low-touch scenario requires a small amount of procurement department involvement. Low-touch RFQs are ideal for mid-range purchases where you're willing to give most of the control to casual users or functional buyers. High-touch RFQs are ideal for large, infrequent purchases or for situations where users don't know which supplier to choose on the request form.

Sourcing request		After users submit request forms in SAP Ariba Guided Buying, a sourcing request is created automatically in SAP Ariba Sourcing. The sourcing manager creates a sourcing project and invites suppliers after all tasks related to the request are done. The sourcing manager awards the best supplier quote, and the requester views it in SAP Ariba Guided Buying. The purchase requisition is created from the winning quote by the requester in SAP Ariba Guided Buying.

Definition:

Strategic procurement, sometimes called strategic sourcing, refers to a long-term approach to procure what a business needs. Decisions are made and plans are drawn up based on market intelligence, analyses of the company’s spend, its present requirements, and a forecast of future needs. It involves fostering collaborative relationships and partnerships with suppliers, which is aimed at bettering service, quality and cost, and encouraging innovation. The relationship is not just a transactional one, and decisions are not made keeping in mind only immediate monetary gains.

Tactical procurement, on the other hand, is more of a short-term procurement strategy focused on fulfilling the company’s more immediate requirements through the best possible deals and with minimal risk. It does not look at broader business goals and objectives, and the relationship with the vendors is transactional and cost-driven.

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